* Brazil to launch massive broadband access plan
* Government expects backbone network operating this year
* To inject 3.22 bln reais into Telebras through 2014
* Shares of Telebras surge 39 pct
BRASILIA, May 5 The Brazilian government said
it would funnel 11 billion reais ($6.1 billion) into a plan to
boost access to broadband Internet services among low-income
households in the Latin America's biggest nation.
The so-called National Broadband Plan includes reviving the
former state telecom monopoly with a four-year capitalization
plan worth 3.22 billion reais, the office of President Luiz
Inacio Lula da Silva's chief of staff said in a statement.
The company, known as Telebras (TELB3.SA), will be tasked
with operating a backbone network of 23,000 kilometers of fiber
optic cable. Shares of Telebras surged 39 percent to 0.26 reais
at noon on Wednesday.
The state development bank BNDES will also provide Telebras
and operators loans worth 7.5 billion reais, the statement
A national fund for telecommunications investments, known
as Funntel, will finance 1.75 billion reais in research and
development expenditures needed to kick off the program.
Private telecom carriers, many of which paid for the right
to operate in the industry in the late 1990s, allege the
broadband plan could hurt them by creating a sub-market inside
the market where they operate.
Parts of the Telebras system, as the former monopoly is
known in Brazil, still exist to honor millions of dollars in
labor-related liabilities. But the company has no actual
day-to-day operations. Recent glitches in the broadband network
of Telefonica (TEF.MC) in Sao Paulo state have revived
discussions about resuscitating Telebras.
Private carriers operate about 200,000 kilometers of fiber
optic cable, about 10 times the size of the government's
(Reporting by Isabel Versiani; Writing by Guillermo
Parra-Bernal; editing by John Wallace)